Suppose the Thai government decided to imposed a tax on the sellers of cigarettes. Due to the tax, consumers buy fewer cigarettes and producers sell fewer cigarettes resulting in a loss of producer surplus and a gain in consumer surplus called tax revenue.

When a good is taxed, only buyers are made worse off, because sellers pass along the tax to buyers in the form of higher prices.

If the labor supply curve is highly inelastic, a tax on labor does not greatly distort market outcomes.

Because many cigarette smokers consider cigarettes to be a necessity, the sellers are likely to bear a smaller share of the tax burden than the buyers.

When world price of product is lower than domestic price, domestic country become the buyer (importer) of the product from the world.

When Tanzania allows trade and becomes an exporter of coconuts, price paid by domestic consumers decreases and consumers are better off.

When countries import the goods from the world, trade raises the economic wellbeing of a nation where gains from producer surplus exceeded the losses from consumer surplus.

Tariff distorts incentives and pushes the allocation of scarce resources away from the optimum leading to inefficiencies from dead weight loss.

Infant industry argument and transfer of technological advances are arguments for trade.

When the nation of Aissur allows trade and becomes an importer of fruits from the world,

Which of the following is not an argument for trade?

3. Country Bossawana is an importer of energy drinks but recently government decided to impose an import tariff on energy drink products to induce domestic production. The area of government revenue is represented by area __________, and total welfare __________.

Country Bara is an exporter of exotic quilts with the situation of the market as in the following graph. After trade

Country Mais is an exporter of eggs to the world. Referring to the graph below, the price after trade is __________ causing consumer surplus to ___________ producer surplus to _________.

To economists, a good environmental policy begins by acknowledging ______.

This graph shows the market for pollution permits. The equilibrium permit price is ________

This graph represents the automotive industry. Without government intervention, the equilibrium quantity is ______. The socially optimal quantity is ______. Government can internalized the externality by ________.

Government tries to measure the benefit of increasing education. The socially-optimal quantity of output in this market is ___________ and government can internalized the externality by ___________ .

A tax on a good with a negative externality can internalize the externality by

When the government auctions off the right to emit a specific quantity of pollution, a market is created for_____

A good is excludable if one person's use diminishes other peoples' use.

Cable TV and national defense is an example of goods excludable and not rival in consumption.

Both public goods and common resources are not excludable, but only public goods are not rival in consumption.

National defense is often used as an example of a public good because providing it to one person does not generally diminish the nation's ability to provide it to another.

Free riding is least likely to occur with common resources.

Suppose that the government has found that a resource that is nonexcludable but rival in consumption is being overused. Which of the following represents all of the solutions that the government could likely use to successfully reduce the overuse of this resource?

A community soccer field that anyone can currently use at any time has become degraded from overuse. Which of the following solutions would be an example of the community solving the problem by taxing the use of a common resource?

Suppose that the town of Winterville is considering hiring an additional lifeguard. The expected benefit is estimated to be worth $2 for each of Winterville's 12,000 residents. The town should hire the lifeguard

If a company released the patents on some of its inventions, allowing anyone to use them without charge, the patented knowledge would go from being

Which of the following is a reason why government agencies subsidize basic research?

If it were built to protect the whole world, an asteroid collision protection system would be an example of a ......

What is the term for a price control that legally established maximum price that can be charged for a good?

Consider the market for apples, where the graph below shows the supply and demand for apples. The current equilibrium market price and quantity are $4 per kg. and 500 units respectively.

Suppose the government decides to impose a price floor of $3 on the market for apples. Which of the following statements is true?

Consider the market for apples, where the graph below shows the supply and demand for apples. The current equilibrium market price and quantity are $4 per kg. and 500 units respectively.

If instead the government imposes a price floor higher than $4, which of the following statements is true?

The supply-demand graph show here includes areas of surplus labeled with the letter.

What area(s) in this graph represent consumer surplus at the equilibrium price (P*) and equilibrium quantity (Q*)?

The supply-demand graph show here includes areas of surplus labeled with the letter.

What area(s) in this graph represent producer surplus at the equilibrium price (P*) and equilibrium quantity (Q*)?

A tax on a good causes the equilibrium quantity to fall, whether the tax is imposed on buyers or sellers.

The tax burden is related to the price elasticity of supply and demand.

An allocation of resources is always efficient if consumer surplus is greater than producer surplus.

An allocation of resources is always efficient if producer surplus is greater than consumer surplus.

Both perfectly competitive markets and central planner are usually good ways to allocate resources efficiently.

What is the term for a price control that legally established minimum price that can be charged for a good?

The graph shown represents a market in which a per unit tax has been imposed. Before tax, the equilibrium market price and quantity are $10 and 500 units respectively. What is the dollar amount of the tax, and who has the tax been imposed on?

The difference between the maximum amount a person is willing to pay for a good and its current market price is known as.......

The difference between the amount the amount a seller is paid for a good and the seller’s cost is known as.............

The supply-demand graph show here includes areas of surplus labeled with the letter.

What area(s) in this graph represent total surplus at the equilibrium price (P*) and equilibrium quantity (Q*)?

Binding price ceilings and shortages may lead to inefficiency in the form of the black market.

In order to ensure higher wages and a good standard of living for the workers, government may use price ceiling policy by setting minimum wage.

When a per unit tax is imposed on a market, the price that buyers pay will always increase by the amount of the tax.

Market efficiency means the goods are being produced by the sellers with lowest cost and consumed by the buyers who value them most highly.

A competitive market is the most efficient way to distribute goods and services. Government should not intervene eventhough market failure occurs.

When a person goes to the job market, he has three choices of job offer; the first job offers a salary of 40,000 baht, the second one offer 30,000 baht, and the third one offers 20,000 baht. Assuming that other factors are equal if this person chooses the job with the highest salary, how much is his opportunity cost of going for this choice?

What constitute the basic functions of the economy?

An economy that allocates resources through the decentralized decisions of many firms and individuals as they interact in markets for goods and services is called …………

Adam Smith once mentioned that households and firms are guided by an “invisible hand” in their transactions. What is most likely to define the invisible hand in Adam Smith’s idea?

A graph that shows the combinations of output that the economy can produce given the available factors of production and the available production technology is called …………….

What of the following is not the cause of market failures?

Economists believe that people always face tradeoffs. That is, to get one thing, we usually have to give up another thing.

Rational economic actors always compare the costs and benefits of alternative choices when making decision.

Market is always a perfect means to coordinate demand and supply, because it is based on price mechanism and thus it has no failure.

Economists generally agree that the government has to get involved in the economy, basically to prevent or remedy the market failures.

In economics, the belief that “trade can make every country better off” is based on the notion that no country is sufficient in itself, meaning that no country can produce all goods and services at the same level of productivity.

The Phillips Curve thesis illustrates that when inflation decreases, unemployment tends to decreases accordingly.

If there are many buyers and many sellers so that each has a negligible impact on the market price, the market is said to be ………………

What is correct about an oligopolistic market?

What is CORRECT about demand?

A situation in which supply and demand have been brought into balance is called ………………..

What is likely to happen if the price of the good is set below market equilibrium price?

What is likely to happen if the price of the good is set above market equilibrium price?

The demand curve shows the relationship between price and quantity demanded.

The law of demand claims that, other things equal, the quantity demanded of a good falls when the price of the good falls.

The law of supply claims that, other things equal, the quantity supplied of a good rises when the price of the good falls.

Exogenous variables can be understood as external factors that affect a shift in demand curve resulting in a change in the relationship between price and quantity demanded.

What is the price elasticity of market demand for ice cream given that:

- The price of ice cream increases from 2 USD to 3 USD

- The quantity demanded for decreases 20 to 10

What does the graph show?

What is the price elasticity of demand for this graph?

Suppose that a demand curve for good A is inelastic and the price of good A increases, what will likely to happen to the total revenue in a market for good A?

What is the price elasticity of supply for this graph?

What does this graph show?

Price elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in the price of that good. It can be calculated as the percentage change in quantity demanded divided by the percentage change in price.

The good with close substitutes tend to have more price elasticity of demand that with the good with no substitutes.

In the long term, the price elasticity of demand for oil tends to be more elastic than in the short term.

If the price elasticity of demand is less than one, then a small increase in price of the good will lead to a large decrease in the quantity demanded for that good.

When the cost of transaction is borne by the society more than that is borne by transaction parties, we call it positive externalities.